Take Charge, Says Jim Howard

These days, business broker James Howard has been selling off small New England companies like an auctioneer on a hot streak. In the last year, Howard clinched almost a deal a week, at an average commission of $28,000; his six-year-old company, Country Business Services in Brattleboro, Vt. (already the biggest small business brokerage firm in New England), netted a million dollars in revenues in 1981.

But making money is not how Jim Howard keeps score. Howard is a man with a sense of mission, and selling businesses is his way of changing the world in small but important ways. ("Head-quarters of the Revolution," proclaims a wooden plaque on the wall of his sparsely furnished office.) His real triumphs are people -- the hundreds of frustrated corporate managers he has plucked out of big compoanies and taught the values of self-determination.

"If you buy a small business from CBS," says Howard, "you've made a decision: to take control of your life and business simulanteously, because you believe more in your own ability to deal with change than in a corporation's ability. You don't cop out when things get tough, because you care about making your business -- and your life -- work."

Howard believes the world would be a better place if more people took control of their own lives, and he preaches constantly about how to do it. His own company operates as a model, with clearly defined procedures, manuals, flow charts; the people who buy companies from him get regular advice -- almost always free -- on how to manage a business in a rapidly changing world. And Howard's preaching clearly seems to make a difference. Out of the more than 150 companies he has sold, only a handful have failed.

Learning how to stay in control, Howard adds, is a skill he's been learning and teaching all of his life. Like most of the entrepreneurs he's put in charge of small manufacturing firms, country inns, retail stores, and restaurants, Howard was a middle-aged refugee from the world of large corporations when he launched Country Business Services in 1976. He had spent 20 years managing a family-owned public relations firm that grew to become the nation's sixth largest, with elegant offices in New York City and a client roster studded with Fortune 500 companies. Increasingly, though, Howard began to wonder how well his impressive clients understood their own world.

"Late in the 1950s," he says, "things were already out of control. When I began to practice public relations, the companies I consulted for didn't have any idea of marketing. They were part of a hardware-oriented, product-oriented economy; they thought in terms of making, selling, and distributing a thing, and they believed if the thing were well made and priced properly, demand would follow. And they got away with it, because they were operating in a very forgiving context. There was rapid population growth. There were undiscriminating markets, created by the baby boom. International competition was limited. Quality standards were lax.

"So, I'd propose some orderly planning to clients -- usually based on a unifying concept, one that would force them to make and keep promises to specific markets, think about how they ran their company, even who they hired. And in many cases my suggestions were just dismissed as radical."

When Howard's firm landed the 1968 Nixon election campaign as a client, he found more evidence of drift. "I thought Nixon and the people around him would be the most competent in the world, because they were the most powerful. But my first discovery was that they were horribly insulated -- and really, not too smart."

By 1970, the close he perceived had affected Howard. He went into a psychological tailspin. "I was blaming myself for the ills of the world," he says. "I had lost self-confidence. The harder I worked, the worse it got. I became more and more nervous, even frightened; I wasn't even communicating with the people around me, the one virtue I'd placed so much value on." Finally, he had a nervous breakdown. He sold his agency. And he had a two-year struggle to pick up the pieces.

Howard fled New York for a stone cottage, without running water or electricity, in Vermont and began -- unsuccessfully -- to dabble in real estate sales. As he struggled to put his life back together, Howard began to look for the sense of control he found so lacking in the corporate world.

"When you have a breakdown," he says, "it's your understanding that collapses. I'd always been a decentralist, yet I'd been overwhelmed by how out-of-control things actually were." Worse, the rate of change was increasing, and Howard saw no sign that big corporations were willing to ask the kind of questions that would let them cope with change. "They just dig into a trench mentality, centralize their assets, put the emphasis on short-term goals like price warfare, and subjugate middle managers and blue-collar work force to the bommon line.No wonder there's a leveling off of growth," he says.

Howard knew there was no point in going back to New York, to the mental chaos of working with big companies. If he were going to take charge of his own life, Jim Howard would have to run a business of his own.

What kind of business? The trick to staying in control, he realized, was to understand thoroughly what you're doing. And that meant asking questions -- lots of questions.

A compulsive list-maker, Howard began by writing down all the goals he could think of for his life. "I resolved to be completely happy with whatever business I was going to start," Howard says. "That way, I wouldn't resist change -- I'd be eager to respond to it, to stay happy."

Howard ended up with 15 criteria that any new business he started would have to satisfy. He wanted to work with a national market; he wanted a chance to use his skills at organization and marketing. A few factors were personal: Howard wanted to stay in Vermont and keep his existing office, equipment, and secretary.

"Finally," he says, "I wanted to feel something I never felt in public relations -- a sense of mission."

Eventually, Howard's months of soul-searching (written out on hundreds of pages of yellow legal pads) yielded four possibilities: farm and timber brokerage, solar-heated home shells, commercial and investment real estate, and small business brokerage. "Then, I ran ads in the New York Times, the Wall Street Journal, and other major newspapers. I made offerings in each of the four fields, to see what kind of, and how many, customers I'd attract. The results were conclusive. Small business brokerage not only drew the greater response but also the kind of people I wanted to work with."

Howard had spent years telling his clients to be more oriented to the market-place; now he had a chance to ask the questions they refused to ask. "Before I started CBS," he says, "I wrote a letter to every small business broker I could find in the country. I could see from the answers what the competition was like. No one had any sense of marketing. Generally, I got responses on scrap paper, from guys who were doing it on the side in their real estate businesses. And then, I pursued the people who answered my ads. I took them out for dinner; I went for long drives with them; and I wrote 10-, 20-, 30-page essays on our relationships. I wound up knowing them better than they knew themselves."

After two years of this kind of painstaking analysis, Jim Howard had a commodity he insists is crucial to any successful business: information. He had information about himself, about his customers, and about his competitors. He'd collected a library of business howto books, product circulars, and magazine articles, and built a network of contacts he could call upon for specialized help.

The answers to Howard's exhaustive questioning quickly paid off. Country Business Services began putting together the buyers and sellers of small businesses with a degree of professionalism almost unheard of in the business brokerage industry. Howard not only offered information, he demanded it of both buyers and sellers. Sellers found they were obliged to give Howard unprecedented access to their financial status and inner workings, or he would simply refuse to handle the transaction. Only about one out of every eight prospective small company listings survived the screening process; some had revenue as little as $50,000 a year, and none were bigger than $8 million. Would-be buyers were pressed to undergo even more rigorous self-examination. Howard placed small classified "Business Opportunity" ads that invited disgruntled corporate managers to write him. The 5,000 people a year who respond to these ads are sent an exhaustive application form that probes their personal values, net worth, and seriousness The few hundred who survive this round are then invited to an interview with a CBS broker that may run anywhere from two to six hours. The cross-examination identifies strengths and weaknesses, energy levels, self-confidence, and -- above all else -- the candidate's ability to take control of his own life and of the company he may end up running.

For both buyer and seller, the sometimes painful process almost always pays off. Instead of trauma and confusion, Howard brought a high level of control to the buying process. Soon CBS was getting the referrals and exclusive listings of prize properties that spell success for any brokerage business. One buyer who went through the process recently described the experience in awed tones: "Jim's company does the homework on their listings; they've culled out the dogs in advance. They introduce you to all the people you need to make a good purchase -- lawyers, bankers, and accountants. The broker I had at CBS did my cash flow projections for me, my Small Business Administration applications. I mean, their attention to quality is bloody unheard of. You'd never find it with an average real estate broker."

What buyers discovered, moreover, was that Howard did more than shake their hands and congratulate them on purchasing a business with lots of potential. Howard and the brokers who worked for him kept coming back with advice and counsel. They would critique a new marketing plan, suggest sympathetic bankers for a larger loan, or just listen when an owner needed to blow off steam. Inevitably, the special relationship Jim Howard has with his former clients generates valuable listings and referrals, but it's also a way of building a future filled with strong, successful, take-charge people -- people who are in control of their own lives.

For Jim Howard, CBS is only a modest beginning. He is well on his way to creating a national market base tied together with computers and meticulously detailed systems. He shows visitors charts that display such goals as $5 million in revenues by 1985, a 20% pretax profit, a nonprofit information foundation, and a franchising program.

But them Jim Howard gets a faraway look in his eyes. At age 54, he's back in control of his own life, teaching others to take charge, and he has found a sense of purpose. "In my optimistic moments," he says with a little smile, "I do like to believe the small business owner can, in the coming decades, serve the function of Jefferson's self-sufficient farmer -- the creator of solid values for an entire nation."